California company plans to expand MX operation

California company plans to expand mX Operation As FBOs go, 10-year-old Jet Source, of Carlsbad, Calif., is fairly young. (Nonetheless, the FBO ranked 35th in AIN’s annual FBO survey.) Located on Palomar-McClellan Airport, it offers an executive terminal and provides maintenance, avionics, ramp service, fuel sales, aircraft charter, management and aircraft sales/acquisition.

The company was launched in 1997 by acquiring Management Air Transport Services’ existing air carrier certificate, approved then for two Learjet 35s. Two years later, Jet Source received worldwide operating authority along with the authorization to operate aircraft with 10 or more seats.

In 2000, Jet Source expanded its operation to become a full-service FBO–including avionics repair–by absorbing Cinema Air Jet Center, also on Palomar Airport. The acquisition allowed the company to expand its repair station authorization to include aircraft maintenance.

Frank Milian Jr., president and COO, told AIN that the avionics and maintenance function operated out of a smaller space until 2005, when the company built a new facility, including a 40,000-sq-ft hangar with 15,000 sq ft of office space primarily to house the combined avionics and maintenance operation. The project included razing two older hangars and building a new business aviation center.

“The $9 million renovation, which also increased customer parking and added a new fuel farm, provided a maintenance hangar large enough to accommodate aircraft as big as the Gulfstream V,” he said. The company is now an unlimited Class III and IV rated FAA-certified aircraft maintenance repair facility and a Class I, II and III avionics repair station.

Milian came to Jet Source almost five years ago from New Jersey, where he ran a company on Teterboro Airport for 15 years. He started his career in the 1960s as an A&P mechanic but eventually took up flying.

“I was a pilot for about 15 years,” he said. “In the mid-1980s I started flying a desk, and I’ve been in senior level management for different companies since then.” Jet Source recruited him to establish the company as a major player in the business aviation arena. Milian is also past chairman of NATA’s Air Charter Committee and currently serves on the board of directors.

Plans for Expansion

He said the company wants to expand all facets of the business but concedes that some are easier to do than others. “We have 11 managed aircraft in our fleet, ranging from Gulfstreams to King Airs, and we’d like to expand that facet of the business because growth is relatively easy. Wherever there’s a hangar, you can position an aircraft and crew. Maintenance is different because you need significant physical plant, and to that end we’re expanding into Las Vegas.”

At Henderson Executive Airport the company is building two 35,000-sq-ft hangars that will essentially duplicate the company’s California facility. “We’ll operate as a corporate aviation center rather than an FBO because the airport management wants to maintain control of the fuel service,” Milian said.

Milian is also looking to expand beyond Henderson and said he’s already done due diligence on an FBO and two charter companies. “They would expand our operation outside Southern California. We’re a relatively young company, yet in the last couple of years we’ve tripled in size, business and the number of employees. Our desire for growth is the primary reason we’ve added Dave [Lohmeyer] to the company.”

Lohmeyer, director of aircraft services, joined the company earlier this year with more than 13 years of corporate aviation expertise and two years’ experience in the airline industry.

Lohmeyer told AIN his marketing strategy for the future will be to target Citations. “We have to work on our core competencies and [expand] our business based upon them. Our market strategy for Citation really has to do with the fact that in California there are more Citations than in any other state in the country, and in Southern California there really isn’t any competition for Citation maintenance.”

Jet Source’s maintenance division currently has 26 employees, a number that includes seven mechanics and 14 avionics technicians. “Our avionics department has gotten some huge contracts with the San Diego and Los Angeles Police Departments. We’re doing a lot of avionics work on helicopters, so demand drove our avionics technician staffing.”

Lohmeyer said the San Diego (SDPD) contract was for airframe and avionics completion for the department’s four new Eurocopter AS 350B3s. The contract called for night-vision-goggle capability, thermal imaging system, an Aero Computers moving map, a custom-designed command radio suite and a customized instrument panel per SDPD design specs. Also included was a sophisticated audio system, upgraded cyclic grips, a microwave downlink system, a digital video recording unit, and Lojack and Pronet tracking systems. The value of the contract was about $2 million.

He estimates that the company will add 12 mechanics over the next few months to support Part 145 growth. “I’m also working with Flight Options and NetJets to bring in their fractional work. Currently we can handle about two inspections simultaneously and do a few unscheduled events.”

Lohmeyer said he’s addressing cycle time issues to accelerate the turn-around on projects. “My goal is to improve on our processes to drive out the inefficiencies so our cycle time drops significantly.”

He is also targeting development of STCs and believes the older Citation market is well suited for such a program. “We’re looking at such things as aftermarket EFIS systems, but at a price that makes sense for operators of older aircraft. When you’re operating an aircraft that’s worth $800,000 to $1 million, you have to watch the bottom line when it comes to upgrades, and that’s the market I want to address.”